FBC Bank Limited has dragged the country’s biggest vehicle assembling firm, Willowvale Mazda Motor Industries, to the High Court, demanding over $4 million loaned to the company last year.
BY CHARLES LAITON
The bank issued the firm summons last month, citing Motec Holdings (Pvt) Ltd as a co-principal debtor and the two have since entered appearance to defend notices.
According to FBC Bank, sometime in February last year, it signed a compromise agreement between itself and the two firms in terms of which the parties entered into new banking facilities.
“The material terms of the agreement were that the initial debt was restructured and that the amount would be repaid in full within a period of five years, which translated to the agreed monthly instalments,” the bank said.
“It was a term of the compromise agreement that interest would accrue on the loaned amount at the plaintiff’s (FBC) minimum lending rate from time to time which was 14% per annum with effect from February 1, 2016 to the date of payment in full.”
The bank further said Willowvale and Motec allegedly breached the repayment terms of the third facility by failing to pay the monthly instalments as agreed, prompting the financial institution to approach the court for recourse.
“As at September 27, 2017, the first defendant was indebted to the plaintiff in the total sum of $3 859 642, 1 … the plaintiff is, therefore, entitled to claim the whole amount outstanding in terms of clause 8 of the deed of compromise,” the bank said, adding it would urge the court to order Willowvale’s piece of land measuring 16 1881 hectares held under deed of transfer number 394/61 to be executable.
In another claim, the bank said in terms of the addendum to the compromise agreement, more particularly in respect to the second facility, Willowvale Mazda allegedly utilised
$90 000, which amount was re-payable in 12 monthly instalments of $7 500.
“The defendants breached the agreement when they failed to pay the instalments as agreed … as at September 17, 2017, the defendants were indebted to the plaintiff in the total sum of $71 306,” FBC Bank said, adding it was, therefore, entitled to claim the whole amount outstanding in terms of clause 8 of the deed of compromise.